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It's Time for Public Sector Haircuts

The private sector has born the brunt of this recession with layoffs, benefit losses, pay cuts, etc.  This has cut a deep swath of distress across America.

Not so the public sector.  19% of federal employees make over $100,000 a year, up from 14% just 18 months ago according to USA Today.  It is highly questionable whether these people do anything useful.  Shuffling papers and going to meetings is today's equivalent of digging and filling a hole in the ground, (only it doesn't keep them in as good physical shape).

Consider the Department of Energy with its $25 billion budget.  Originally established to promote US energy independence it has failed miserably in its goal.  The DOE, of course, works on other things, same questionable results, things the free market could handle much more efficiently, at no cost to tax payers.

I guess governmental employees could claim they spend their earnings in the private sector, thus stimulating the economy.  If that is so great let's double or triple the number of federal employees.  Heck, while were at it, lets pay em all over $100,000.  Break out the band boys, the party is rolling again!

Then, consider the beneficiaries of government spending, everyone from bank executives to social program beneficiaries.  In order to solve our problems they ALL need haircuts, especially at the upper end.  AIG executives should be getting pay cuts not bonus's, same for Fannie and Freddie and the other beneficiaries of governmental largess.  Will this happen?  Will pigs fly?

Think of California.  California is in danger of default on its obligations.  They could do it orderly with haircuts or disorderly with default.  Since no one wants haircuts the disorderly option becomes increasingly likely.

Oh, of course, I'm forgetting something:  The cavalry (Feds) could ride to the rescue.  The governator is already writing his proposal.  Other financially strapped states will surely follow.  This is how it all will probably play out.

California's dismal options now become the US's dismal options.  Again: "Since no one wants haircuts the disorderly option becomes increasingly likely".   We are well down that road.